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Use the following information to answer the next several questions. The Norris Company is looking to fund a new project with capital from both bondholders

Use the following information to answer the next several questions.

The Norris Company is looking to fund a new project with capital from both bondholders and shareholders. The project will cost $5,000 with 60% being financed with bonds requiring 5% interest and the remainder with shareholder investment. The company predicts there is a 65% chance the project will be a success worth $9,000. The overall expected cash flow from the project for the Norris Company is $6,725.

*Write values without symbols (for example 5% is just 5 and $7,500 is just 7500; Note however to use a decimal for percentages - so 5.5% would be 5.5)

*Round your final answer to the nearest whole number for dollar amounts ($5,599.50 would be written as 5600)

*Round your final answer to 2 decimal places for percentage answers ( -7.583% would be written as -7.58)

1. What is the value of the project if it does not turn out to be a success?

2. What is the cash flow to shareholders if the project is a success?

3. What is the expected cash flow for bondholders?

4. What is the expected cash flow to shareholders?

5. What is the expected rate of return for bondholders?

6. What is the expected rate of return for shareholders?

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